The Power of “Noble Experiments” – Chip Conley on leadership

By Erika Brown Ekiel | Yahoo Small Business

Chip ConleyChip Conley, founder of Joie de Vivre Hotels, discusses leadership, his bad first job, and the best business book he's ever read.

Chip Conley (MBA '84) is the founder of Joie de Vivre Hotels, California's largest boutique hotel collection, which includes more than 30 properties. Joie de Vivre Hospitality, the parent company of Joie de Vivre Hotels, oversees a collection of restaurants, spas, and affiliate hotels, and operates on a revenue run rate of $240 million a year. Conley was CEO of JDV from its founding in 1987 until 2010. He is the author of four books, including Emotional Equations: Simple Truths for Creating Happiness and Success and The Rebel Rules: Daring to Be Yourself in Business. Conley travels the world to speak about business and leadership, and gave 100 speeches in the first half of 2012.

Far from retirement, Conley is building a new hotel in Palo Alto dubbed “The Epiphany,” set to open in 2013, as well as an 1,100-acre wellness center in Todos Santos, Mexico, on the Pacific ocean. A director of Burning Man, an annual event held in the desert and centered on art, self expression, and self reliance, he is developing a website aimed at helping people find the perfect festival for them, whether that means The Running of the Bulls in Spain or a Whirling Dervish festival in Turkey. Leading up to our interview, Conley said he had just returned from a weeklong silent meditation retreat. “All my answers will be in Haiku,” he says.

In 10 words or fewer, what is the big idea behind your business?

Pose as

boutique hotelier

instead create

identity refreshments

What is the best advice you’ve ever received?

Oscar Wilde said, “Be yourself, everyone else is taken.” Most businesses benchmark themselves versus others and don’t imagine how they could be transformative and disruptive. About 10 years ago during the dot-com bust, I chose to use Maslow’s Hierarchy of Needs as an evolved business model for how JDV would operate. There was no evidence that anyone else had ever done that before. It was well suited for my personality. The idea of applying a psychology theory to a fundamental business model was sort of weird but it helped us triple in size when many others went out of business.

What was the most difficult lesson you have learned on the job?

My most recent lesson was The Great Recession. Fundamentally in work, there are three relationships: You either have a job, a career, or a calling. For 22 years my calling was the founder and CEO of Joie de Vivre and growing it to the second-largest boutique hotelier in the U.S. A calling can deflate so that it becomes a career and then a job. When the calling starts to deflate, the anesthetic wears off.

The most difficult time in my career was in 2008 and 2009 when it became extremely apparent to me that what had been a calling was now merely a job. It came at a time when I had to work 100 hours a week and had to act as if it was a calling. To be the CEO of a company means if you have 3,500 employees, as we did then, you are under the microscope. Your emotional state of being is magnified. I felt embarrassed and guilty that my state of mind — and my state of heart — for the company was not there when it needed to be. That is one reason I decided to sell a majority interest in my company to an investor who didn’t mind me stepping out of the business.

The lesson was that vulnerability can be very powerful. We say we want leaders to be authentic, and we want them to be strong. But being vulnerable and confident at the same time is a powerful combination.

What advice would you give other entrepreneurs on how to build a great business?

I’m a huge believer in Abraham Maslow’s Hierarchy of Needs. What brings a sense of meaning for your stakeholders? What creates a transformative, self-actualized experience for your customers? How do you create pride of ownership for your investors? Remember, we are all human. If you are a good reader of emotions you will be successful wherever you are.

What inspires you?

For a long time it was being an incubator for entrepreneurs. JDV was a place where someone who was an entrepreneur and wanted to start a spa or restaurant or hotel could come and join us and learn the business, and then move on to do their own thing. I like entrepreneurial people — they want to learn, and while they are with us, they are very engaged. I took great pleasure in watching people I mentored go out and start their own businesses. One guy was a felon who had been in state prison for two years. He joined us as a front desk clerk, grew to be an office manager, then assistant manager. After 10 years he started his own valet parking company. He got funding from Obama’s stimulus act and was invited to the White House and The Today Show. We took a chance on a felon who grew up in the Mission and helped him become a young icon for entrepreneurship in America.

What is your greatest achievement?

Having a 35-year-old son as well as a six-month-old son.

What do you consider your biggest failure?

I like to consider failures “noble experiments.” For me it was Costanoa, a luxury campground between Half Moon Bay and Santa Cruz in California. It was an inspired idea but the execution was challenging and the location was challenging. We sold it after three years for a fraction of what we spent to build it. We did learn unique ways to deliver service in a remote location.

How do you come up with your best ideas?

Running on the beach with my dog, Sugar Ray. For some reason more ideas come to me when I am near water — even taking a bath. I just did a weeklong meditation retreat. Freeing up the mind is a good way to get to inspiration. We fill our lives with so little space. Inspiration looks for crevices to parachute into. The fewer crevices you create in your life, the less likely you are to have inspiration come through you. You need to allow yourself to be a vessel so that something can come through you.

What values are important to you in business?

You can see who’s most powerful in a society based on who has the tallest buildings. Two hundred years ago it was cathedrals. Fifty years ago it was a government building. Today, in most urban areas, the power rests with business and skyscrapers. Business is the most powerful influence in the world today. Fifty-four of the 100 most powerful entities in the world today are companies, not countries. That means it is that much more important that businesses take a conscious capitalist perspective to make a difference in the world. I’m a big believer in that on a global level. Businesses are finally asking, what is our ecological footprint? I also believe businesses need to look at their emotional fist print on their employees.

Our work is the most predominant use of our time. We spend more hours in our working life than our family life. Yet for many people their working life leaves an emotional fist print as if they're getting punched. It creates anxiety, anger, and a sense of being abused. That can have a contagious effect on their family, friends, and everybody around them. How do we measure that? Fifty years ago we had no idea we could measure our ecological footprint. How can we start measuring and managing what’s most important in life?

What impact would you like to have on the world?

I’m proud and honored that I am seen to be a thought leader at the intersection of psychology, philosophy, and business. If I can help the business world think a bit more broadly and consciously, that would be a great impact to have on the world.

What was your first paying job?

McDonald’s, when I was 15. I made milkshakes and made sure the fries didn’t burn. They treated me like a robot. I hated it. I lasted about five weeks.

What is the best business book you have read?

Man’s Search for Meaning, by Viktor Frankl. It influenced my perspective on how to create meaning for employees and how to create culture in my organization.

What businessperson do you most admire?

Herb Kelleher, who was the CEO of Southwest Airlines for 37 years. He created an enduring culture. He believed that most businesses had gotten it wrong: They love techniques and use people, as opposed to vice versa. I admire the organization he created, against all odds. The airline industry is treacherous.

What do you think is the greatest innovation in the past decade?

The internet is more than a decade old. However, there is no doubt that the internet as a disruptor, connector, and way of life is profound.

This piece was originally published on 9/14/2012 by Stanford Graduate School of Business, and is republished with permission. For more insights and ideas on business and management sign up for their free email newsletter, Stanford Business Re:Think. Follow them @StanfordBiz.